Note 6 - Convertible Debenture | Note 6 Convertible Debenture Convertible debentures consist of the following at July 31, 2015 and October 31, 2014, respectively: July 31, October 31, 2015 2014 Originated October 6, 2014, unsecured $48,000 convertible promissory note, which carries an 8% interest rate and matures on July 9, 2015 (First KBM Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date, or $0.00005 per share, whichever is greater. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. Note was converted to stock during the nine months ended July 31, 2015 (less unamortized discount on beneficial conversion feature of $-0- and $41,815, respectively) $ - $ 6,185 Originated November 7, 2014, unsecured $43,000 convertible promissory note, which carries an 8% interest rate and matures on August 11, 2015 (Second KBM Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date, or $0.00005 per share, whichever is greater. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. Note was paid in full during the nine months ended July 31, 2015 (less unamortized discount on beneficial conversion feature of $-0- and $-0-, respectively) - - Originated December 10, 2014, unsecured $33,000 convertible promissory note, which carries an 8% interest rate and matures on September 12, 2015 (Third KBM Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date, or $0.00005 per share, whichever is greater. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. Note was paid in full during the nine months ended July 31, 2015 (less unamortized discount on beneficial conversion feature of $-0- and $-0-, respectively) - - Originated February 23, 2015, unsecured $33,000 convertible promissory note, which carries an 8% interest rate and matures on November 25, 2015 (First Vis Vires Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. (less unamortized discount on beneficial conversion feature of $8,265 and $-0-, respectively) 24,735 - Originated June 8, 2015, unsecured $54,000 convertible promissory note, which carries an 8% interest rate and matures on March 8, 2016 (Second Vis Vires Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date. In the event of default, the minimum amount due is 150% x (outstanding principal plus unpaid interest), and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. (less unamortized discount on beneficial conversion feature of $38,559 and $-0-, respectively) 15,441 - Originated July22, 2015, unsecured $38,000 convertible promissory note, which carries an 8% interest rate and matures on April 22, 2016 (Third Vis Vires Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (51%) of the average of the three lowest closing bid prices of the Companys common stock for the thirty (30) trading days prior to the conversion date. In the event of default, the minimum amount due is 150% x (outstanding principal plus unpaid interest), and the debt holder is limited to owning 9.99% of the Companys issued and outstanding shares. (less unamortized discount on beneficial conversion feature of $37,585 and $-0-, respectively) 415 - Originated May 7, 2015, unsecured $10,000 convertible promissory note, which carries an 8% interest rate and matures on February 8, 2016 (First 145 Carroll Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. (less unamortized discount on beneficial conversion feature of $4,436 and $-0-, respectively) 5,564 - Originated May 8, 2015, unsecured $110,000 convertible promissory note ($56,000 received as of July 31, 2015), which carries a 10% interest rate and matures on May 8, 2016 (First JDF Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. (less unamortized OID and derivative discounts of $47,427 and $-0-, respectively) 14,173 - Originated June 10, 2015, unsecured $250,000 convertible promissory note ($25,000 received as of July 31, 2015), which carries a 0% interest rate for the first three months, and matures on June 10, 2017 (First JMJ Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the lowest trade price of the Companys common stock for the twenty-five (25) trading days prior to the conversion date. (less unamortized OID and discount on beneficial conversion feature of $25,582and $-0-, respectively) 1,918 - Originated May 27, 2015, unsecured $74,500 convertible promissory note, which carries an 8% interest rate and matures on November 27, 2015 (First Minerva Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. (less unamortized discount on beneficial conversion feature of $48,182 and $-0-, respectively) 26,318 - Originated June 29, 2015, unsecured $10,000 convertible promissory note, which carries an 8% interest rate and matures on February 28, 2016 (Second Minerva Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest closing bid prices of the Companys common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Companys issued and outstanding shares. (less unamortized discount on beneficial conversion feature of $8,688 and $-0-, respectively) 1,311 - Originated July 9, 2015, unsecured $53,000 convertible promissory note, which carries a 10% interest rate and matures on July 9, 2016 (First Essex Note). The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the lowest closing price of the Companys common stock for the ten (10) trading days prior to the conversion date. (less unamortized discount on beneficial conversion feature of $49,814 and $-0-, respectively) 3,186 - Convertible debenture 93,061 6,185 Less: current maturities of convertible debenture (93,061) (6,185) Long term convertible debenture $ - $ - The Company recognized interest expense in the amount of $9,721 and $-0- for the nine months ended July 31, 2015 and 2014, respectively, related to the convertible debentures above. In addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible debts by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price of the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt. The aforementioned accounting treatment resulted in a total debt discount equal to $343,458for the nine months ended July 31, 2015 and $45,980 for the year ended October 31, 2014. The discount is amortized on a straight line basis, which approximated the effective interest method due to the short term duration of the note, from the dates of issuance until the stated redemption date of the debts, as noted above. The convertible debentures, consisting of total original face values of $124,000 from KBM Worldwide, Inc., that created the beneficial conversion feature carry default provisions that place a maximum share amount on the note holders that can be owned as a result of the conversions to common stock by the note holders is 4.99% of the issued and outstanding shares of Pocket Games. During the nine months ended July 31, 2015 and 2014, the Company recorded debt amortization expense in the amount of $166,487and $-0-, respectively, attributed to the aforementioned debt discount. KBM Worldwide, Inc. Convertible Note On October 6, 2014, we entered into a Securities Purchase Agreement with KBM Worldwide, Inc. (KBM), pursuant to which we sold to KBM an 8% Convertible Promissory Note in the original principal amount of $48,000. The First KBM Note has a maturity date of July 9, 2015, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the First KBM Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the First KBM Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the First KBM Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0328 below the market price on October 6, 2014 of $0.067 provided a value of $45,980, of which $41,815and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On November 7, 2014, we entered into a Securities Purchase Agreement with KBM Worldwide, Inc. (KBM), pursuant to which we sold to KBM an 8% Convertible Promissory Note in the original principal amount of $43,000. The Second KBM Note has a maturity date of August 11, 2015, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the Second KBM Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Second KBM Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the Second KBM Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0329 below the market price on November 7, 2014 of $0.09 provided a value of $43,000, of which $28,253 and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On December 10, 2014, we entered into a Securities Purchase Agreement with KBM Worldwide, Inc. (KBM), pursuant to which we sold to KBM an 8% Convertible Promissory Note in the original principal amount of $33,000. The Third KBM Note has a maturity date of September 12, 2015, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the Third KBM Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Third KBM Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the Third KBM Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0493 below the market price on December 10, 2014 of $0.0899 provided a value of $27,176, of which $18,118 and $-0- was amortized during the ninemonths ended July 31, 2015 and 2014, respectively. On February 23, 2015, we entered into a Securities Purchase Agreement with Vis Vires Group, Inc. (Vis Vires), pursuant to which we sold to Vis Vires an 8% Convertible Promissory Note in the original principal amount of $33,000. The First Vis ViresNote has a maturity date of November 25, 2015, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the First Vis Vires Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the First Vis Vires Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the First Vis Vires Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0541 below the market price on February 23, 2015 of $0.0860 provided a value of $19,426, of which $11,161 and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On June 8, 2015, we entered into a Securities Purchase Agreement with Vis Vires Group, Inc. (Vis Vires), pursuant to which we sold to Vis Vires an 8% Convertible Promissory Note in the original principal amount of $54,000. The Second Vis ViresNote has a maturity date of March 8, 2016, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Closing Bid Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the Second Vis Vires Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Second Vis Vires Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the Second Vis Vires Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0230 below the market price on June 8, 2015 of $0.0430 provided a value of $46,957, of which $8,397 and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On July 22, 2015, we entered into a Securities Purchase Agreement with Vis Vires Group, Inc. (Vis Vires), pursuant to which we sold to Vis Vires an 8% Convertible Promissory Note in the original principal amount of $38,000. The Third Vis ViresNote has a maturity date of April 22, 2016, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 51% multiplied by the Market Price (representing a discount rate of 49%). Market Price means the average of the lowest three (3) Trading Prices for the Common Stock during the thirty (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the Third Vis Vires Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Third Vis Vires Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the Third Vis Vires Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0209 below the market price on July 22, 2015 of $0.1500 provided a value of $38,000, of which $415 and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On May 7, 2015, we entered into a Securities Purchase Agreement with 145 Carroll, LLC (145 Carroll), pursuant to which we sold to 145 Carroll an 8% Convertible Promissory Note in the original principal amount of $10,000. The First 145 Carroll Note has a maturity date ofFebruary 8, 2016, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Trading Prices for the Common Stock during the ten(10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the First 145 Carroll Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the First 145 Carroll Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the First 145 Carroll Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0159below the market price on May 7, 2015 of $0.0260provided a value of $6,400, of which $1,964and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On May 8, 2015, we entered into a Securities Purchase Agreement with JDF Capital, Inc. (JDF), pursuant to which we sold to JDF a 10% Convertible Promissory Note in the original principal amount of $110,000 ($56,000 received during the quarter ended July 31, 2015). The First JDF Note has a maturity date of May 8, 2016, and is convertible into our common stock at the greater of (i) the Variable Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The shares of common stock issuable upon conversion of the First JDF Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the First JDF Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the First JDF Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Variable Conversion Price and, as such, constitutes a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the VariableConversion Price the appropriate number of shares will be available or issuable for settlement to occur. The initialconvertible debt derivative liabilities were $59,850and $239,269 at July 31, 2015. The Company recorded a derivative discount in the amount of $56,000 and amortized $12,888 of this discount during the nine months ended July 31, 2015. The First JDF Note also contained an original issue discount (OID) of 10 % of the cash received or $5,600. This OID is being amortized over the term of the note. During the nine months ended July 31, 2015, $1,285 was recorded as interest expense related to the OID. On June 10, 2015, we entered into a Securities Purchase Agreement with JMJ Financial (JMJ), pursuant to which we sold to JMJ a Convertible Promissory Note in the original principal amount of $250,000 ($25,000 received during the quarter ended July 31, 2015). The First JMJ Note has a maturity date of June 20, 2017, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean the lesser of $0.03 or 60% multiplied by the lowest trade price for the Common Stock during the twenty five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the First JMJ Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the First JMJ Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the First JMJ Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0150 below the market price on June 10, 2015 of $0.0380 provided a value of $25,000, of which $1,744 and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. The First JMJ Note also contained an original issue discount (OID) of 10 % of the cash received or $2,500. This OID is being amortized over the term of the note. During the nine months ended July 31, 2015, $174 was recorded as interest expense related to the OID. On May 27, 2015, we entered into a Securities Purchase Agreement with Minerva Capital Corp. (Minerva), pursuant to which we sold to Minerva an 8% Convertible Promissory Note in the original principal amount of $74,500. The First Minerva Note has a maturity date of November 27, 2015, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the First Minerva Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the First Minerva Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the First Minerva Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The beneficial conversion feature discount resulting from the conversion price of $0.0159 below the market price on May 27, 2015 of $0.0350 provided a value of $74,500, of which $26,318 and $-0- was amortized during the nine months ended July 31, 2015 and 2014, respectively. On June 29, 2015, we entered into a Securities Purchase Agreement with Minerva Capital Corp. (Minerva), pursuant to which we sold to Minerva an 8% Convertible Promissory Note in the original principal amount of $10,000. The Second Minerva Note has a maturity date of February 28, 2016, and is convertible into our common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 58% multiplied by the Market Price (representing a discount rate of 42%). Market Price means the average of the lowest three (3) Trading Prices for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 per share. The shares of common stock issuable upon conversion of the Second Minerva Note are restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Second Minerva Note is exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser is an accredited and sophisticated investor, familiar with our operations, and there was no solicitation. The Company evaluated the Second Minerva Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of |